Notion Capital Reaches First Close for Fund 2: UPDATED

Notion Capital has reached a $100 million first close for Notion Capital Fund 2, its second fund focussed on emerging cloud computing and Software-as-a-Service companies in the UK and across Europe. The target of the fund is up to $150 million and a final close is expected in the next few months. UPDATE: More details here in this Reuters story.

PRESS RELEASE

Notion Capital today announced a $100m first close for Notion Capital Fund 2, its second fund focussed on emerging Cloud Computing and Software-as-a-Service (SaaS) companies in the UK and across Europe. Total fund size will be up to $150m at its final close, expected in the next few months.

From its first fund, Notion Capital has already invested almost $50m in 10 high-growth companies with demonstrable value creation across the portfolio, which includes some of Europe’s most exciting and fastest growing companies such as Brightpearl, eSellerPro, NewVoiceMedia, Star and Tradeshift. Star now has $80m in revenues and is profitable and Tradeshift recently completed a new funding round valuing the business at $137m having only been operating for two years.

Notion Capital is aiming to replicate this success on a much larger scale with Fund 2. The new fund is backed by both the UK government, under its Enterprise Capital Fund programme, and the European Investment Fund, marking the first time these two organisations have worked together in this way, and reflecting their conviction that Notion’s pedigree and strategy can help Europe take its fair share of the Cloud Computing economy.

The team at Notion have previously founded, built and exited three successful technology businesses, including MessageLabs, that was sold to Symantec for $700m, representing one of the largest ever transactions for a Cloud Computing business.

By 2014, Gartner estimates that the Cloud Computing marketplace will reach $148bn while Cisco Analytics predicts that more than 50% of all workloads will be processed in the Cloud. A recent report by IDC suggests that Cloud Computing will create 14m new jobs by 2015 in terms of how it delivers economic value to countries, cities, industries, and small businesses.

Cloud Computing represents a generational change for computing and communications impacting both the business and consumer markets. The disruptive potential of the market represents a huge opportunity for innovative, early stage companies in the space.

Stephen Chandler, Managing Partner and Co-Founder at Notion Capital commented: “Our strategy is to only invest in what we know (i.e. Cloud Computing and SaaS) and we think this gives us a strong advantage in the market for both evaluating and supporting companies. It is working well for Fund 1 and we will follow the same strategy on a larger scale for Fund 2.

We aim to identify and support European companies that can become global leaders and generate exits that can be measured in hundreds of millions. We have a bias towards Europe because we believe there are tremendous opportunities here and the market is under-supplied with high quality funds. Although it has been one of the most challenging environments to raise a fund in living memory, there are a good number of people out there who recognise the opportunity and the work Notion has done with companies so far.”

ENDS

For further information, please contact:

Neil Robertson at Speed Communications
Email: Neil.robertson@speedcommunications.com
Tel: +44 (0) 207 7842 3211
Mob: +44 (0) 773 932 2503
@neil_robertson

Simon Matthews at Speed Communications
Email: simon.matthews@speedcommunications.com
Tel: 0207 7842 3242

About Notion Capital:

Notion is a venture capital firm focused on high potential businesses in the Cloud Computing and Software-as-as-Service (SaaS) markets. The Notion team has unique expertise and experience in the Cloud Computing market having founded, built and exited two highly successful businesses in the space – Star and MessageLabs. The five partners at Notion are Stephen Chandler, Ian Milbourn, Chris Tottman and brothers, Jos and Ben White. Companies within Notion’s portfolio include Brightpearl, eSellerPro, NewVoiceMedia, Star and Tradeshift. For more information go to: www.notioncapital.com

About Capital for Enterprise Limited:

Capital for Enterprise Limited (‘CfEL’) is an asset management business that designs, implements and manages finance measures to support Small and Medium Size enterprises (‘SMEs’) across the UK. CfEL is the largest single investor in UK Early Stage Venture Capital funds and manages guarantee programmes to support bank lending. With current investment commitments of over £1billion in a wide range of Venture Capital funds, together with its responsibility for the Enterprise Finance Guarantee, CfEL has over £3.0 billion in commitments, assets and liabilities directly under management.

The Enterprise Capital Fund (‘ECF’) programme is intended to address a long-term structural weakness in the provision of risk capital for high potential SMEs in the UK. ECFs are commercial funds, which bring together a combination of private and public money in order to support high growth businesses. The programme operates by providing gearing on private investments in the funds, in effect offering enhanced profits to private investors when funds are successful.

CfEL commenced trading in April 2008 and is wholly owned by the Department for Business, Innovation and Skills (‘BIS’).

Capital for Enterprise Ltd. Registered in England and Wales No. 06179047. Capital for Enterprise Fund Managers Ltd is regulated by the Financial Services Authority. Registered in England and Wales No: 06826072

About the EIF:

EIF’s central mission is to support Europe’s small and medium-sized businesses (SMEs) by helping them to access finance. EIF designs and develops venture capital and guarantees instruments which specifically target this market segment. In this role, EIF fosters EU objectives in support of innovation, research and development, entrepreneurship, growth, and employment. The EIF total net commitments to private equity funds amounted to over EUR 6bn at end 2011. With investments in over 370 funds, the EIF is a leading player in European venture due to the scale and the scope of its investments, especially in high-tech and early-stage segments.

The EIF guarantees loan portfolio totalled over EUR 7.6bn in close to 220 operations at end 2011, positioning it as a major European SME guarantees actor and a leading micro-finance guarantor.

The fund is supported by the European Union through the Competitiveness and Innovation Framework Programme (“CIP”).

Other:

Notion Capital Fund 2 is not open to investment from members of the general public. Past performance is not an indicator of future performance and the value of investments can go up as well as down.
Notion Capital Partners 2 LLP, the operator and manager of the fund, is authorised and regulated by the Financial Services Authority (FRN number: 565008) with registered address Suite 101, Eagle Tower, Montpellier Drive, Cheltenham, Gloucestershire GL50 1TA.

US Investors:

This press release is directed only to countries other than the United States. The fund is not being offered in the United States or to U.S. persons at this time.

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